As the Wall Street Journal reports in its quarterly review today (subscription required), investment and universal banks’ securities underwriting activity over the past three months has fallen to levels not seen since the last few months of 2008.

Stock and bond securities issuance was down 33 percent from the same period last year. Even as they take a hit on underwriting, banks may have run into trouble with their trading-profits strategy of borrowing cheap to push up bond prices, too, as the bond-market rally seems to have lost steam.

The stock market isn’t doing so great, either, meaning few IPOs and few private-equity deals (private-equity investors’ “exit strategy” from illiquid deals is often a booming stock market).

If the trend holds up in the summer — and summer is not generally Wall Street’s most optimistic season — look for lower-than-expected profits from Wall Street’s banks, and another corporate and personal-income tax slump for New York.

A queasy bond market is bad news, too, for state and local governments, as they try to refinance debt against the backdrop of their own big deficits as well as Washington’s.